ECONOMY JULY 24, 2013
The Republican National Committee didn’t wait for President Obama to give his big address today before rendering a verdict on it. “Same Speech, Different Day.” And, for a change, they had it exactly right.
Speaking before an audience in Galesburg, Illinois—the place where, as a newly elected senator, he gave his first big speech on economic policy—Obama laid out the same basic principles, the same basic ideas, and the same basic arguments he’s given us many times before. The recovery is steady but slow: Too many people are out of work or making too little money. Inequality is too stark. Government should finance infrastructure projects, take action to reduce college tuitions, and invest in struggling communities. Republicans should stop trying engage in sabotage, whether by undermining his health care law or by playing brinksmanship over the debt.
Yes, you heard a version of this during the State of the Union address, and in Obama’s Democratic Convention speech, and on dozens of other occasions. The focus has changed a bit: There’s less emphasis on measures that will help the jobless right away, like quick injections of assistance for the states, and more emphasis on measures that will boost future productivity, like improving public education. But it’s fundamentally the same pitch he has always made, about using government to make sure that the economy doesn't stall and that growth benefits a large swath of Americans and not just the wealthiest and luckiest. The slogan—"middle out"—is new. The idea behind it is not.
And that's fine. The arguments for these measures seem no less valid now than they were six months or a year ago. Take infrastructure, a subject on which I’ve written lately. The nation’s transportation networks still need a lot of work—Obama had a great line about bridges that were eligible for Medicare. The same goes for water pipes, air traffic control systems, and power grids. As Andrew Samwick, the Dartmouth economist, has written about this kind of work, “you have to do it at some point”—so why not when labor is available and money is so cheap to borrow?
Obama critics like to say these policies were tried and failed. And if you agree with them, then you probably found very little in Obama’s speech to like. But the reason Obama keeps calling for these steps is that congressional Republicans keep blocking them. And while versions of these ideas, or some of them, were in the Recovery Act, the evidence suggests they worked pretty well. That program stopped the steep economic decline Obama inherited and started the economy growing again. It hasn’t grown quickly enough, or helped enough people, but, as I think most mainstream economists would agree, that has more to do with too little investment and stimulus—not too much. (It also has something to do with recent spending cuts, which has meant government is shedding jobs even as the private sector is adding them.)
Which isn’t to say Obama’s agenda is always what it should be, or above serious critcism. Writing at Bloomberg, Evan Soltas proposed a set of eight intriguing ideas, like much greater investment in job training. Paul Krugman and my colleague Noam Scheiber are questioning Obama’s apparent inclination—reported by Ezra Klein—to choose Larry Summers over Janet Yellen to take over the Federal Reserve. But getting new and interesting ideas through Congress, not to mention confirming a chairman for the Fed, require assent from congressional Republicans. And that’s been tough to find lately.
Obama mentioned Republican obstructionism in his speech, not once but several times, and not in short bursts but for extended soliloquies. There’s a reason. Major fiscal fights loom—over how to pay for government services, and under what conditions to raise the nation’s borrowing limit. House Republicans are already warning of new attempts at brinkmanship—like threatening to shut down the government if Obama won’t agree to de-funding of his health care plan.
Wednesday’s speech was the beginning of an effort to remind the American people about the stakes in those fights, and who supports what. Obama’s not going to win over the conservative base of the Republican Party, obviously, but he’s having at least some success working with less extreme members, like Senators John McCain and Lindsey Graham. Not coincidentally, Obama chose his words carefully, criticizing a “a sizable group of Republican lawmakers” who have threatened not to raise the debt limit but also praising the “growing number of Republican Senators [who] are trying to get things done."
It’s not out of the question Obama could find enough support among Republicans like these to eke out a little money for a programs here and there—maybe a down-payment on his pre-kindergarten initiative, or funding to prepare Southeast ports for super-ships coming through the newly modernized Panama Canal. The best case scenario is that Obama gets voters attention, enough to change the political calculus even for more hostile Republicans and possibly even force them out of office at the midterms.
But mostly this is about stopping bad stuff from happening. It has been for a while. Wednesday's speech was familiar because the situation is, too.
Jonathan Cohn is a senior editor at the New Republic. Follow him on twitter @CitizenCohn